In what came as a major relief to digital wallet companies in India, the Reserve Bank of India has relaxed interoperability norms for them. It will now be possible for these digital wallets to not only transfer funds from one wallet account to another, but also make two-way transfers, reports Economic Times.
This means that users can now transfer funds between wallets and also from their wallets to bank accounts. For example, a Paytm user can send money to a MobiKwik user.
All these have been made feasible with one rider that the wallets must have fully complied with the KYC norms already spelt out by RBI. What’s more these digital wallets will get the opportunity issue prepaid cards to their customers too.
RBI has cleared the air on all these matters relating to the digital or e-wallet operations in its detailed guidelines. The interoperability will be implemented with the Unified Payment Interface (UPI). The same way, the cards, if issued will be brought within the existing card networks which have a robust arrangement in accepting cards issued by different entities through the POS machines irrespective of who supplies these machines.
Some of the existing regulations governing the issuance of and transactions through all card instruments, particularly with regard to the security requirements will apply to these PPIs too, issued by the e-wallet companies. This will also mean these companies may not have to reinvent the wheel by going through onboarding of merchant establishments either. The cards issued will follow the EMV chip design from the word go unlike the existing card issuers who are still in the process of replacing the old magnetic strip cards. So, for all practical purposes, it’s a win-win situation for them.
One significant development out of these fresh RBI guidelines is that some of these digital wallets can short-circuit the banks and offer direct deals to their customers. One has to wait and watch how this pans out in practice and how the customers react to these developments.